Tuesday 14th September 2010 |
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The receivers of failed minnow lender Mutual Finance say three months into the process they still can’t say how much the government will get back under the retail deposit guarantee.
Grant Graham and Brendon Gibson of KordaMentha say “at this time it is not possible to estimate the level of recovery” from Mutual’s loan book worth some $8.2 million and other assorted assets.
The lender owes some 340 investors $9.3 million, about $8 million of which was covered by the government’s retail deposit guarantee.
The financier was sent to the receivers in July after breaching its trust deed, though principal Paul Bublitz criticised the decision, saying it was an “extremely conservative” view of its cashflow by trustee Covenant Trust.
The receivers expect the Inland Revenue puts in a claim, though they doubt there will be enough to make a return to unsecured creditors.
Bublitz, one of the Strategic Finance founders who exited before its sale to Allco, resurfaced up last year when his related party loans to Viaduct Capital shareholder Phoenix Finance Holdings cost the lender its protection from the government’s guarantee.
Since then, Viaduct was sent to the receivers, and Bublitz emerged to takeover Mutual, which was set to become 100% in October.
The first receiver’s report on Viaduct estimates the government will only claw back between 28 cents and 33 cents after stepping in for the firm’s guaranteed depositors.
Businesswire.co.nz
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